Shop Before the Drop

Splurging, pre–fiscal cliff.

People whose incomes put them in the top 2 percent of earners can at this juncture count on one of two things to happen come January. In the better scenario, Democrats and Republicans negotiate a compromise that will raise their taxes and could cost them tens of thousands of dollars or more. In the worse scenario, with the nation Wile E. Coyote–ing over the fiscal cliff, not only will their taxes will go up but their net worth may suffer a double blow from a stock-market meltdown and/or a new economic recession. Given those prospects, a financial planner might well advise a person in this category to be a little more conservative with their year-end spending—maybe choose between the Lanvin rabbit scarf or the Chanel earmuffs, but not get both. But, of course, people do not always behave rationally when it comes to their money. This is something that Natalie Decleve has experienced firsthand.

Decleve is a personal stylist with an hourly rate starting at $250. “I was with a client of mine at Barneys recently,” she says. The client, a finance guy, was refreshing his wardrobe to the tune of $19,000. The doings in Washington were his justification for the spree. “We’ve only got a few months left that we have extra money to burn,” Decleve recalls him saying. It was the second time Decleve had a client tell her that. The first was from a guy who also works in finance, and his reasoning was the same: Spend it while you got it.

Decleve knows what one might ask at this point: If they felt compelled to unload some cash, why not invest in things that hold value, “like art or real estate?” she says. But a different psychology is at work here. The urge to splurge was already in these men. They just needed a justification for acting on it. “They’re usually spending large chunks of money with me, it’s always something that is exciting,” she says, “and at the same time they have to rationalize it.” Decleve’s clients spend because they’ve had a good day or a bad week. They spend because they’ve gotten a raise or because they’re getting a divorce.

A former fashion publicist who dabbled in modeling (“My problem was that I always had an opinion about what they were putting me in”), Decleve has noticed that her male clients shop differently than her female ones. The latter are more likely to brag about what a bargain they’ve found—“For women, it’s like, ‘You’ll never believe the deal I got’ ”—whereas men are more likely to brag about spending a lot. “I know several clients … who love to be like, ‘I spent this much on my wife’s ring,’ ” she says. “It’s sort of a talisman of their success.” Maybe, if the goal is to spend like you just don’t care, the fiscal cliff is the perfect excuse.